§ 352-k. Broker dealer minimum capital requirements. 1. Every\nbroker-dealer registered or required to be registered in this state\nshall have and maintain a net capital of not less than five thousand\ndollars. The term net capital shall be deemed to mean the net worth of a\nbroker or dealer (that is, the excess of total assets over total\nliabilities), adjusted by\n (a) adding unrealized profits (or deducting unrealized losses) in the\naccounts of the broker or dealer and, if such broker or dealer is a\npartnership, adding equities (or deducting deficits) in accounts of\npartners, as hereinafter defined;\n (b) deducting fixed assets and assets which cannot be readily\nconverted into cash (less any indebtedness secured thereby) including,\namong other things, real estate; furniture and fixtures; exchange\nmemberships; prepaid rent, insurance and expenses; good will;\norganization expenses; all unsecured advances and loans; customers'\nunsecured notes and accounts; and deficits in customers' accounts,\nexcept in bona fide cash accounts within the meaning of section 4(c) of\nregulation T of the board of governors of the federal reserve system;\n (c) deducting the percentages specified below of the market value of\nall securities, long and short (except exempted securities) in the\ncapital, proprietary and other accounts of the broker or dealer,\nincluding securities loaned to the broker or dealer pursuant to a\nsatisfactory subordination agreement, as hereinafter defined, and if\nsuch broker or dealer is a partnership, in the accounts of partners, as\nhereinafter defined:\n (1) in the case of non-convertible debt securities having a fixed\ninterest rate and a fixed maturity date which are not in default, if the\nmarket value is not more than five per cent below the face value, the\ndeduction shall be five per cent of such market value; if the market\nvalue is more than five per cent but not more than thirty per cent below\nthe face value, the deduction shall be a percentage of market value,\nequal to the percentage by which the market value is below the face\nvalue; and if the market value is thirty per cent or more below the face\nvalue, such deduction shall be thirty per cent;\n (2) in the case of cumulative, non-convertible preferred stock ranking\nprior to all other classes of stock of the same issuer, which is not in\narrears as to dividends, the deduction shall be twenty per cent;\n (3) on all other securities, the deduction shall be thirty per cent;\nprovided, however, that such deduction need not be made in the case of\n(1) a security which is convertible into or exchangeable for other\nsecurities within a period of thirty days, subject to no conditions\nother than the payment of money, and the other securities into which\nsuch security is convertible, or for which it is exchangeable, are short\nin the accounts of such broker or dealer or partner, or (2) a security\nwhich has been called for redemption and which is redeemable within\nninety days.\n (d) deducting thirty per cent of the market value of all "long" and\nall "short" future commodity contracts (other than those contracts\nrepresenting spreads or straddles in the same commodity and those\ncontracts offsetting or hedging any "spot" commodity positions) carried\nin the capital, proprietary or other accounts of the broker or dealer\nand, if such broker or dealer is a partnership, in the accounts of\npartners as hereinafter defined;\n (e) deducting, in the case of a broker or dealer who has open\ncontractual commitments, the respective percentages specified in\nsubparagraph (c) above of the value (which shall be the market value\nwhenever there is a market) of each net long and each net short position\ncontemplated by any existing contractual commitment in the capital,\nproprietary and other accounts of the broker or dealer and, if such\nbroker or dealer is a partnership, in accounts of partners, as\nhereinafter defined; provided, however, that this deducti
‹ Prev All New York sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.